San Diego Housing Bubble News and Analysis

Agreed, this wont be the last of a failout attempt. and today will surely scare a lot of the "common man" not familiar with the situation.
But, be careful out there. This is game for professionals right now. Swings are huge and unknown.

Be careful with ultrashort/ultralong ETFs, they are derivative based (futures, options, total return swaps). In the event of a derivative meltdown, your investments may go down the drain.

Agreed. This is pure speculation, gambling. But I'm good at that.

WARNING: the vast majority of people in this overall Piggington forum should consider the ideas in this thread totally inappropriate for executing within their portfolios.

Tomorrow could be another DOWN day but if it is, I will double-down my 2X long positions, probably this time going 2X long the NASDAQ which is already now down 30% off the Oct 2007 highs.

Great, just what I needed. Stockstrader to be on the same side of the transaction as me. We're doomed. See another 700pt drop tomorrow.

Thanks a lot stockstrader :(

Talk from many analysts is that tomorrow could be another hard day down. Well, we gotta get to 11 P/E ratios anyway. And of course, these are with the new lower sales figure headed at the end of this fiscal year. Ouch. Look out below.

Be very careful here. Total gamble, IMO. Might wanna try Secuan instead. At least they get you drunk..I've heard.

Well, stockstradr, you sure have chutzpa. Or, to use a somewhat more vulgar term, huevos muchos grandes.

I think there are two ways to approach it. Try to ride the short term, high frequency volatility, or try to bet on the long term returns based on fundamentals (and try to hold firm when the volatility goes irrationally against the fundamentals). Both require some nerve, but the former involves trying to time the market and guess which cliff the lemmings will jump off of next. If you guess wrong, or try to get out late, it can really bite you. But if you guess right and get out in time before the fundamentals slap people back to reality, you can really do well. I think that's how Soros amassed his billions. Good luck to you! I'm holding the longterm positions, just generally bearish on fiat currency, bearish on real estate and equities in real terms but unsure in nominal terms so staying mostly away. Not very exciting. Maybe I can live vicariously through your daring adventures! Keep us posted...

underdose, that's a very intelligent post.

Today marks a dangerous transition for me where my market plays now involve some pure attempts to simply time the market.

I agree with you that, in general, it is BAD PRACTICE to gamble at timing the market, particularly with risky bets that run counter to a cyclical bear market trend. (unless you have the facility of accurate precognition, which i don't claim)

Previously my strategy was exclusively making long-term bets on the underlying fundamentals (such as my shorting the S&P500 back in Oct '07), short dolar, long gold, and additionally I have dabbled in less risky market timing by closing shorts at temporary market bottoms and buying at the crest of Fool's Rallies. So previously I avoided trying to time the market in counter-market plays.

A third option to consider and one I should have done today was the volatility play. I knew the markets were going ape shit, just not which direction. Its called a straddle. You buy a put and a call with some margin below and above the current price for each. If the market moves violently either way you win. If it doesn't you lose.
Josh

I am sitting on my hands right now. I have some plays that are giving me a return but because of the extreme moves, I won't risk my capital. There is just way too much panicked money out there that can put you on the wrong side of the trade too fast. Good luck to all of you. If I was going to play in this market in the next couple of days it would only be a day trade and I wouldn't hold anything overnight.

1 Rumor or announcement could reverse this market violently in either direction and crush your position. Preservation of capital is my motto right now.

My2Cents

"I agree with you that, in general, it is BAD PRACTICE to gamble at timing..."

Oh, I wouldn't call it a bad practice. I just personally don't have the stomach for it. I mentioned Soros as an example of someone who made it a very profitable practice, and you may turn out to have a similar knack. But you've REALLY got to have nerves of steel. It should be fun, in a may-age-you-quickly sort of way! I'll really cheer for you if it works. (Although, I'll also cheer if your Roubini is wrong and gold takes off sooner rather than later since I'm still long....)

Agree with Running Bear. I've been actively trading the market for a few years (mostly short) and am very, very light right now, after closing out a number of short positions.

Long Swiss Treasuries, some foreign currency CDs, US T-bills, "newly-protected" MM funds and very few shorts/even fewer longs. It's all about capital preservation right now, IMHO.

If there was a time for straddles and strangles this would definitely be the type of market to play them with. However trying to play them on financials right now is just too risky at the current options prices. On friday I was thinking about stradding Wachovia on Oct $10 calls/puts. At the time it would have cost $7.25/share to do that. Even with the hit they took today I would barely be above break even. The risk/reward ratio is way too low to make straddles a viable play. But maybe it would be worth it for non-financial companies. If anyone has any good suggestions I would be glad to hear about them :)

We're probably looking at a short term buy opportunity with a dead cat's bounce. I have co-workers who are saying things like "with the market so low, maybe I should put more in my IRA".

I'd say if we get down to 1000 or so it's a great buy opportunity. That would be another 9% from where it closed today, and if that happens I'm throwing as much cash as I can at the market.

I should have bought the financials end-of-day yesterday, but alas I didn't have sufficiently sized balls

I'm dollar cost averaging into this market. Started in the early 1990's, addicted to it. Can't stop.

I'm debating what I should do before today

1) Close out my position in BAC opened yesterday for a 12% profit, or

2) Write some covered call, expiring Oct 18 with a strike price $35/share with an option contract at $2.24, to see if I can book a larger profit if a bailout happens, while reducing some of the potential fallout if another bailout isn't gonna happen.

Selling a $35/share covered call with expiration in 3 weeks, I can pocket $2.25, so if the bailout does propel BAC, I'll book a $5 profit + the $2.25 option price.

In the event the bailout doesn't happen, BAC tanks the covered call expires worthless, so I'll get to keep the the $2.25/share, plus whatever price BAC fetches, which means my cost basis would end put being around $27.85 before i lose money....

Hmmmm decisions, decisions. Thoughts? Yeah it's gambling. So what....

Hey, stockstradr. Assuming your 2X s&p position was taken before open of business today, you're up almost 9%! Not a bad return for a whole year. Spectacular for just one day! How long to plan to let it ride? When do you take profits?

The corporate representatives in congress will probably get something out of this by Friday. So this should be a good week to buy puts and get some shorts. Or sell those crap equities that have been tanking most of the year. DOW at 9000 be December looks pretty possbible now.

I am very tempted to take a bite from the buiilders. TOL, LEN and CTX may be ready to adjust in the next couple of months. I think good old TIF may be ready as well.

Assuming your 2X s&p position was taken before open of business today, you're up almost 9%! Not a bad return for a whole year. Spectacular for just one day! How long to plan to let it ride? When do you take profits?

Honest answer? I only bought SSO with 10% of my portfolio yesterday, and the markets fell another few percent after I bought. So today I'm "only" up 4.4% on that particular position, which you must divide by ten to estimate contribution to overall porfolio. (A big 0.44%)

However, early this morning I also bought another 10% of my portfolio position 2X long the NASDAQ (ProShares QLD) after I saw markets moving a direction I liked. I'm also up about 5% in one day on that particular QLD position.

When gambling and this is gambling, I first take a nibble. Then if the market moves in direction confirming my initial prediction, then I take another nibble. (Pigs do get slaughtered, after all)

However, 25% of my portfolio remains gold "GLD", and today's paper losses in "GLD" are about equal to my paper profit in those other two long positions described above! So today is a wash.

So far, I'm thankful I sold half my gold yesterday, taking profits. So far, my hunch was right that gold will fall as stock markets now go into Fool's Rally mode

As soon as this Fool's Rally is near completing a total up move of 10%, I'll dump my long positions on the S&P500 and NASDAQ. Markets are very nervous so less likely to reward with a big Fool's Rally. We'll be lucky to see 10%...unless the congress comes through by passing a gratuitous bail out package. And we are already HALFway towards completing that 10% Fool's Rally, aren't we?

Never mind. In at $30.25, out at $38 today. That was fun....Next up, GE... If warren buffet is investing $3billion in it, can't be a dumb move, right? :)

Congress could just as easily pass a plan that Wall Street does not like. Toss in a bit a lousy news, retail sales, bank default, etc. and the market could tank.

50/50 chance long or short.

Very early this morning (markets down 1%) I dumped my 20%-of-portfolio postion that was 2X long the S&P500 and NASDAQ.

I got scared when I saw markets woke up with what looked like a BAD MOOD. Now I see stock markets have recovered to be mostly flat.

I agreee with those recommending "capital preservation" as their primary focus during these chaotic market conditions. Also too difficult to predict if a significant Wall St. bailout will pass.

So I'm 25% gold and 75% cash. Kitco shows gold is pretty much flat for the day. So far i was right about gold falling (short-term) as gold is now down to $871.

In at $30.25, out at $38 today.

Nice play, I assume on BAC. That's the way to get it done!

I agree if Buffet is investing, it gives me confidence. I have all his books. Man's brilliant.

It's only fun until I lose my shirt :)

Really, I'm a crack addict gambler.

I cut my losses on SSO earlier today, and it looks like it was the right thing to do.

740 points. Jeez.

Will we see Dow 9000 this week, or will we finally get some help from Helicopter Ben?

Jesus.

I am so so glad i entered those SELL ALL at market orders this morning before markets opened. Five minutes into today's trading I was 75% cash and 25% gold.

At least I'm making some pocket change back today on that gold, up 4% so far today.

By going long last Friday i lost about 7% on my portfolio in a day and a half trading, and I'm glad to escape with only a few wounds.

However, don't forget I'm still up over 25% net for the last 12 months across all trades including commission costs.